What can you do if your bank charges illegal overdraft fees?

A:

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Consumers can file complaints about overdraft charges services with the Consumer Financial Protection Bureau, according to its website. The Office of the Comptroller of the Currency also takes consumer complaints at HelpWithMyBank.gov if the bank is a national bank or federal savings association.

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The Board of Governors of the Federal Reserve issued overdraft protection rules that came into effect on Jan. 19, 2010. They prohibit financial institutions from charging consumers a fee on some transactions unless the consumer specifically opts for overdraft protection, according to the U.S. Office of the Comptroller of the Currency. The 2010 law prohibits the automatic assessment of an overdraft fee for ATM and debit card transactions, but it does not prohibit automatic overdraft charges for checks or recurring electronic payments, according to the Consumer Financial Protection Bureau.

Forbes reported in 2012 that the CFPB had begun investigating bank practices because it appeared that some banks manipulated the order in which transactions were processed to maximize the odds of an overdraft situation occurring. The CFPB reviewed a study by the Federal Deposit Insurance Corporation which found that 84 percent of overdraft fees were borne by just 9 percent of checking account customers and that low income and young consumers were mostly affected by the fees.